A game-theoretic study of competition dynamics of tourism supply chains for package holidays

Abstract

We consider two competitive tourism supply chains that provide package holidays. Each tourism supply chain contains three sectors. The hotel & accommodation providers and the theme park operator, in the upstream, provide options for the tour operators, in the downstream, for configuring and marketing package to tourists. All the autonomous enterprises in tourism supply chains compete with each other to maximize their own profits. There are three types of competition: inter-sector competition between suppliers within a sector, sector competition between sectors in the tourism supply chain, and chain competition between different tourism supply chains. A gametheoretic framework is proposed to study inter-sector competition, horizontal sector competition, and chain competition, and leader-follower games for studying vertical sector competition. A number of managerial insights for tourism manager are generated and discussed.